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The Final Tax Code: Unlocking the Secrets to a Seamless Closure

Are you aware of the tax code registration procedure? If not, join us as we explore the insightful and beneficial information on this essential process!

Administrator

20 July, 2024

Closing a tax code is the process of terminating its validity at government agencies. Today, we will guide you through the quickest and easiest procedure to close your tax code!

1What is the procedure for closing a tax code?

Closing a tax code involves terminating its validity at the tax management agency.

Closing a tax code, or terminating its validity, entails ending the validity of the tax code at the tax management agency.

For businesses intending to dissolve, this means their tax code status on the tax authority’s data system will be locked, forcing the company to cease operations. They will be unable to perform any tax code-related tasks, such as filing returns, paying taxes, or modifying business registration information.

The procedure for closing a tax code is, therefore, a necessary step in the dissolution process at the tax authority.

2Procedure for Closing a Business Tax Code

Step 1 Report on Invoice Usage

Businesses must report their invoice usage as per regulations.

Businesses are required to report their invoice usage in accordance with the law. This is outlined in Section III of Official Dispatch 2010/TCT-TVQT 2019, which provides guidance on implementing certain provisions of Circular 39/2014/TT-BTC on decrees related to sales invoices.

On a quarterly basis, organizations and individuals selling goods or providing services must submit an Invoice Usage Report to their managing tax authority. Newly established enterprises, however, must use self-printed or ordered invoices.

Step 2 Taxpayer Fulfills Tax Obligations

Businesses must fulfill their tax obligations as per the Law on Tax Administration.

After submitting the Invoice Usage Report to the competent tax authorities, the taxpayer must fulfill their obligations as per Clause 1, Article 67 of the 2019 Law on Tax Administration.

This involves completing tax obligations in cases of bankruptcy, dissolution, or cessation of business operations as stipulated by law.

Step 3 Prepare the Dossier for Closing the Tax Code

Businesses must prepare their dossier in accordance with the law.

Upon completing the tax payment process, the business owner must prepare a dossier for closing the tax code as per Clause 4, Point a, Article 17 of Circular 95/2016/TT-BTC issued by the Ministry of Finance, which provides guidelines on tax registration and specifies the requirements for a tax code closure dossier. The dossier content may vary depending on the subject.

For economic organizations and other organizations

For the parent organization, the dossier comprises:

A written request to terminate the validity of the tax code, using Form No. 24/ĐK-TCT
The original Tax Registration Certificate or Tax Code Notification, or a written explanation if these documents are lost.
A copy of the dissolution decision, bankruptcy initiation decision, etc.
A confirmation letter from the General Department of Customs, verifying the completion of tax obligations related to import-export activities, if the organization has been engaged in such activities.

For a subordinate unit, the dossier includes:

A written request to terminate the validity of the tax code, using Form No. 24/ĐK-TCT issued together with this Circular
The original Tax Registration Certificate or Tax Code Notification; or a written explanation for the loss of these documents
An uncertified copy of the decision to terminate the activities of the subordinate unit, or the notification of the termination of activities by the parent unit, or the decision to revoke the business registration certificate of the subordinate unit by the competent authority
A confirmation letter from the General Department of Customs, verifying the completion of tax obligations related to import-export activities, if the organization has been engaged in such activities.

For contractors, investors participating in oil and gas contracts, and foreign contractors

For contractors, investors in oil and gas contracts, and foreign contractors

A written request to terminate the validity of the tax code, using Form No. 24/ĐK-TCT issued together with this Circular
A contract liquidation document (if any) or a document on the transfer of the entire capital contribution to participate in the oil and gas contract, for investors participating in the oil and gas contract
A confirmation letter from the General Department of Customs, verifying the completion of tax obligations related to import-export activities, if the organization has been engaged in such activities.

For households, groups of individuals, and business individuals

For households, groups of individuals, and business individuals

A written request to terminate the validity of the tax code, using Form No. 24/ĐK-TCT issued together with this Circular
The original Tax Registration Certificate or Tax Code Notification; or a written explanation for the loss of these documents
An uncertified copy of the decision to revoke the Business Registration Certificate of the household, group of individuals, or business individual (if any)

For Enterprises

The dossier for enterprises to complete tax obligations with the tax authority before proceeding with dissolution procedures at the business registration agency is as follows. In the case of self-dissolution, the dossier comprises:
The dissolution decision
Meeting minutes
A confirmation letter from the General Department of Customs, verifying the completion of tax obligations related to import-export activities, if the enterprise has been engaged in such activities.

Step 4 Submit the Dissolution Dossier to the Receiving and Processing Agency

Once the tax code closure dossier is ready, submit it to the tax authority.

Step 5 Tax Authority Receives and Processes the Tax Code Closure Dossier

The tax authority receives the dossier and initiates the tax code closure process.

Upon submission of the dossier to the tax resolution agency, they will perform specific procedures, and your company must also undertake the following tasks:

Within 2 working days from receiving the company’s dossier for tax code termination, the tax authority must issue a Notification of Cessation of Operations and Tax Code Termination Procedures, using Form No. 17/TB-ĐKT issued together with this Circular, and send it to the company. Simultaneously, they will change the company’s and its subordinate units’ status to “Taxpayer ceasing operations but not yet completing tax code termination procedures” on the Tax Registration Application System.
Within 3 working days from the company’s completion of tax obligations with the tax authority and customs authority, or from the tax authority’s completion of transferring all tax obligations of the subordinate unit to the parent unit as per regulations, the tax authority shall issue a Notification of Tax Code Termination, using Form No. 18/TB-ĐKT issued together with this Circular, and send it to the company.
The company is responsible for fulfilling the tax obligations of the subordinate unit with the tax authority managing that unit after the tax code termination of the subordinate unit.
If the company submits a tax code termination dossier but its subordinate units have not completed the tax code termination procedures, the tax authority managing the parent unit must notify the company, the subordinate unit(s), and the tax authority directly managing the subordinate unit(s). The subordinate unit(s) must complete the tax code termination procedures before the company can terminate its tax code.

After the company ceases operations, if it continues to operate, it must register for taxes with the directly managing tax authority to obtain a new tax code or make a conversion as per Article 23 of this Circular. If the company has terminated its tax code but the subordinate unit(s) continue(s) to use the 13-digit tax code according to the parent unit’s tax code, it is considered illegal tax code usage.

3Cases for Closing a Tax Code

Various cases and conditions for closing a tax code.

For Enterprises

The enterprise ceases operations, is dissolved, or goes bankrupt
The enterprise has its Business Registration Certificate revoked
The enterprise undergoes restructuring (split, separation, merger, or consolidation)

For Economic Organizations, Other Organizations, Households, Groups of Individuals, and Business Individuals

Economic organizations and other organizations cease operations; households, groups of individuals, and business individuals cease business operations.
Economic organizations and other organizations have their Establishment and Operation Permit, or equivalent certificate, revoked; households, groups of individuals, and business individuals have their Business Registration Certificate revoked due to legal violations.
Restructuring of economic organizations (split, merger, or consolidation), conversion of an organization from a subordinate unit to an independent unit or vice versa, or transfer of a subordinate unit from one parent unit to another.
Economic organizations and other organizations are issued a notification by the tax authority, stating that the taxpayer has not operated at the registered address for more than a year and has not re-registered their operations.
Contractors, investors participating in oil and gas contracts, and foreign contractors complete their contracts or transfer their entire capital contribution to the oil and gas contract.
Foreign contractors complete their contracts.

For economic organizations, other organizations, households, groups of individuals, and business individuals

For Subordinate Units

The subordinate unit receives a decision to terminate its activities from the parent unit.
The subordinate unit’s tax code is terminated when the parent unit’s tax code is terminated.
The subordinate unit has its Establishment and Operation Permit, or equivalent certificate, revoked as per regulations.

For Individuals Not Engaged in Business

The individual dies, goes missing, or loses civil act capacity as per law.

The above are the key considerations and procedures for closing tax codes for different entities. Understanding these will ensure a swift and smooth tax code closure process. Hopefully, this information will be useful to you.